Translated material
Great Power Tax
Russian authorities reported for the first time on spending to help humanity
Russian authorities have spent about $220 million this year on various international development programs, from fighting malaria in Mozambique to providing food aid to Uzbekistan and Kyrgyzstan. Just three years ago, these expenses did not exceed 60 million. But this is not the limit. By 2011, these amounts will reach 250 million. This is Russia’s price for a worthy place in the global financial system.“If we want to participate in the creation of a system of international financial relations, the formation of financial institutions, if we want to be heard, then we have to pay for it,” said Deputy Minister of Finance Dmitry Pankin at a press conference on Russia’s role in promoting international development. According to another participant in the press conference, Deputy Minister of Foreign Affairs Alexander Yakovenko, “in the long term it is worth bringing this figure to at least 0.7% of GNP. Promoting international development is an important tool that increases Russia’s external authority.”
Moscow helps international development not only with money. It renounced recipient status, and funds that were previously spent on programs in Russia will now go to the poorest regions of Asia and Africa, Mr. Pankin explained.
As the head of the Russian representative office of the World Bank, Klaus Roland, said, “now is the time, on the eve of Christmas and New Year, when the governments of all developed countries report to their taxpayers about where the money went.” Russia is taking part in this for the first time.
As Mr. Yakovenko explained, Russia currently makes voluntary contributions to such UN organizations as the World Food Program ($11 million), the World Health Organization (5 million), the Industrial Development Fund (2.6 million), the for Peacebuilding (2 million), Economic Commission for Europe (1.2 million), Development Program (1.1 million), Children's Fund (1 million), and a number of others.
“As can be seen from the figures, we give priority to cooperation in the field of food security. We are convinced that providing food to the needy population is an important part of any humanitarian operation,” Mr. Yakovenko emphasized. He also expressed hope that the financial crisis will not affect the implementation of various countries' commitments to promote development programs. “Developed countries, including Russia, have confirmed that they intend to ensure the fulfillment of their obligations to provide assistance to developing countries and to prevent reductions in both existing and new programs in the field of development assistance,” said the Deputy Minister of Foreign Affairs of the Russian Federation.
The only question is how much Russia itself may need this money in the near future. The global financial crisis is far from over. And although Dmitry Pankin believes that these expenses, even taking into account the planned increase, will not in any way affect the financial situation within the country, it is possible that in the near future every ruble will have to be counted. “We have enough reserves to cover any financial problems in 2009-2010,” he is confident. According to World Bank forecasts, if the oil price falls below $30 per barrel, Russia will have to turn to external borrowing again. The Deputy Minister of Finance does not rule out such a development. “So far, our debt strategy does not provide for the use of external borrowings. But if the oil price stays at $30 for a long time, then the strategy may have to be revised,” admitted Mr. Pankin. True, we are not necessarily talking about external loans. According to him, there are large resources in the domestic market and such an instrument as Eurobonds is used extremely little.